- Morning Briefing w/ KevinD
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- Wednesday July 24 @ 9:00am
Wednesday July 24 @ 9:00am
Tech selling off on disapointing TSLA and GOOGL earnings and weakness in semiconductors
KevinD
July 24, 2024
"Technical analysis reflects the voice of the entire marketplace and, therefore, does pick up unusual behavior. By definition, anything that creates a new chart pattern is something unusual."
📈 The Markets Overnight
🌏 Asia: Down
🌍 Europe: Down
🌎 US Index Futures: Down a lot
🛢 Crude Oil: Up
🪙 Gold: Up
🧐 Yields: Mixed
💵 Dollar: Down a bit
🔮 Crypto: Mixed
🌏 Major Global Catalysts
Mega-cap earnings misses. (link)
💵 Economic Reports and Events Today
8:30am Preliminary Wholesale Inventories m/m: 0.5% expected, 0.2% reported, 0.6% previous. Change in the total value of goods held in inventory by wholesalers. (link)
9:45am BOC Monetary Policy Report and Rate Statement: 4.50% expected, 4.75% previous. Decision on the interest rate at which the Bank of Canada lends to commercial banks, accompanied by an overview of economic conditions and the factors influencing the decision. (link)
9:45am Flash Manufacturing PMI: 51.7 expected, 51.6 previous. Level of a diffusion index based on a survey of purchasing managers in the manufacturing industry. (link)
9:45am Flash Services PMI: 54.7 expected, 55.3 previous. Level of a diffusion index based on a survey of purchasing managers in the services industry. (link)
10:00am New Home Sales: 639K expected, 619K previous. Annualized number of new single-family homes that were sold during the previous month. (link)
10:30am Crude Oil Inventories: -2.6M expected, -4.9M previous. Change in the number of barrels of crude oil held in inventory by commercial firms during the past week. (link)
📰 Selected Earnings Releases
Consensus Estimates shown
After Hours Today:
F Ford Motor EPS: 0.68 Revenue: 44.02B (link)
CMG Chipotle Mexican Grill EPS: 0.32 Revenue: 2.94B (link)
LVS Las Vegas Sands EPS: 0.56 Revenue: 2.80B (link)
WHR Whirlpool EPS: 2.37 Revenue: 3.95B (link)
WM Waste Management EPS: 1.83 Revenue: 5.43B (link)
IBM IBM EPS: 2.19 Revenue: 15.62B (link)
URI United Rentals EPS: 10.54 Revenue: 3.77B (link)
NOW ServiceNow EPS: 2.84 Revenue: 2.61B (link)
Pre-Market Tomorrow:
HOG Harley-Davidson EPS: 1.40 Revenue: 1.28B (link)
HON Honeywell International EPS: 2.42 Revenue: 9.41B (link)
KDP Keurig Dr Pepper EPS: 0.45 Revenue: 3.91B (link)
AAL American Airlines Group EPS: 1.05 Revenue: 14.36B (link)
LUV Southwest Airlines EPS: 0.51 Revenue: 7.32B (link)
NOC Northrop Grumman EPS: 5.93 Revenue: 10.02B (link)
RCL Royal Caribbean Group EPS: 2.75 Revenue: 4.04B (link)
VLO Valero Energy EPS: 2.60 Revenue: 33.67B (link)
AZN AstraZeneca EPS: 1.20 Revenue: 12.71B (link)
CARR Carrier Global EPS: 0.84 Revenue: 7.00B (link)
🔮 Selected Analyst Ratings Changes
PG Procter & Gamble: Jefferies Downgrades to Hold Lowers Target to $175.00
AKAM Akamai Techs: HSBC Upgrades to Hold Targets $96.00
GM General Motors: Morgan Stanley Downgrades to Equal-Weight Raises Target to $47.00
LMT Lockheed Martin: TD Cowen Upgrades to Buy Raises Target to $560.00
SPOT Spotify Technology: Goldman Sachs Upgrades to Buy Raises Target to $425.00
ULTA Ulta Beauty: Piper Sandler Downgrades to Neutral Lowers Target to $404.00
📉 Stocks In Play
TSLA Tesla: Down 9% after the company beat sales estimates but missed on EPS with its second consecutive quarter of declining profit. Additionally, Musk pushed the robotaxi out even farther than anticipated. (link)
GOOGL Alphabet: Down 5% after the company beat analysts' estimates but reported lower ad sales growth and high AI costs moving forward. (link)
NVDA NVIDIA: Down 3% as semis continue to sell off with the rest of the tech sector. (link)
RIVN Rivian Automotive: Down 5% as a judge declined to dismiss a case against the company accusing it of encouraging former Tesla employees to steal trade secrets. (link)
T AT&T: Up 3% after sales missed slightly, earnings were in line, and subscriber growth strongly beat expectations. (link)
Other notable earnings movers: TXN +1.5%, V -4%, ENPH +2.5%, STX +2.5%, DB -6%, GD -4%
💬 Commentary
The market was choppy yesterday as the rotation into small caps continued, with IWM gaining 1% while the senior indices finished the day slightly lower. Most sectors were lower, led to the downside by the energy sector's 1.6% decline. Only materials and financials managed to close higher. The decline in the senior indices intensified in after-hours trading as earnings reports from both Tesla and Alphabet disappointed, sending QQQ down an additional 0.7%.
The market's downturn this morning, driven by significant losses in the Nasdaq, underscores the volatility surrounding the Mag 7 stocks. Google's and Tesla's earnings misses have contributed to the sell-off, affecting investor sentiment. Despite the overall weakness, small caps are showing relative resilience, though they are still down by 0.5%.
Given the current climate, investors are looking for strong earnings reports from the remaining Mag 7 companies to possibly stabilize the tech sector. The upcoming PMI reports, which will be released after the market opens, might help to slow the decline if they come in favorably, though they are unlikely to reverse the trend on their own. The real potential for a market turnaround may lie in the GDP report tomorrow and the PCE report on Friday, which could provide a clearer picture of economic conditions and influence market direction significantly.
⛵ When you’re ready…
Some tools/resources that I personally find valuable.
A powerful yet simple fundamental analysis tool: Stock Unlock
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Analyze trade ideas with me, KevinD, in live calls: My trading group
#1 charting software for serious traders: TradingView
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